Why Retailers Must Offer Date-Certain Shipping This Holiday Season

FedEx, UPS and the U.S. Postal Service provide their customers with real-time shipment updates. They also give merchants access to many shipping service types — e.g., next-day, two-day, three-day, ground, and more. Similarly, online retailers can and should offer shipping choices to their customers. For example, Amazon.com, the king of e-commerce fulfillment, gives customers multiple date-certain delivery choices, also known as date-certain shipping or deterministic shipping.

Over 65 million Amazon Prime members are presented with these options, and an increasing number of fast followers are adopting similar strategies, leaving those brands that don’t at a competitive disadvantage.

Amazon has made date-certain shipping an e-commerce imperative. Merchants that offer deterministic shipping, especially during the holidays, will enjoy higher conversion rates and sales than those that do not.

Given that Amazon spent $16.2 billion on shipping expenses in 2016 alone, we can be certain that it has cracked the shopping cart conversion code better than anyone else, especially when it comes to shipping and fulfillment.

Figure 1: Amazon shopping cart on 9/19/17

Let’s examine this shopping cart above, observing the tactics being used, and consider their impact on both consumers and the merchant:

• Choices increase conversion: This Amazon Prime customer is presented with four delivery choices, including receiving their order next day for an additional $5.99 (1) or in two days at no charge (2). 
• Customer incentives reduce shipping expenses: If a customer chooses FREE No-Rush Shipping (3), they receive $10 towards a purchase at Amazon Restaurants. Amazon regularly offers its customers incentives to help cut down its massive $16.2 billion shipping expense. This offer isn't random — it’s part of a broader strategy to attract new users to Amazon Restaurants.
• Urgency increases conversion: Look at option (4) in the image above. The customer is guaranteed delivery by Sept. 21 (two days) if she purchases in the next seven hours, 27 minutes. As the customer is looking at their cart, that clock is ticking down, second-by-second, shouting “buy me now if you need me by Thursday!”

Act Now to Reduce Your Accessorial Charges and Return Rates

By giving date-certain shipping options, Amazon is reducing a few of its accessorial charges (i.e., surcharges imposed by the carriers) as well. Choosing a delivery date reduces the number of unsuccessful deliveries, which reduces delivery reattempt fees and expenses.

When customers know when the package will arrive at the time of ordering, they know when to expect it. They're not disappointed provided the delivery date commitment is met. This minimizes the number of returns from the customer due to shipping-related uncertainty.

Deterministic Shipping Can Help You Improve Customer Service, Too

Timely and accurate delivery status updates reduce "where is my order?" (WISMO) customer service calls, especially during the holiday surge.

• WISMO customer service requests can generate upwards of 70 percent of all customer inquiries during the holidays.
• Frequent and easily available shipping updates can cut WISMO calls by 50 percent or more.
• By having a deterministic shipping system in place, you can reduce overall customer service inquiries by 10 percent to 30 percent, freeing up customer service representatives to respond to inquiries that require their expertise.

Upgrade Your Customer Experience and Brand Perception This Holiday Season

If carriers can provide real-time status updates on their websites, then you can for your customers, too — online, and via app notification, email and SMS.

• Provide a branded order tracking page and include links to it on all prominent pages.
• Provide a link to online package tracking in your shipping notification emails.
• Send an email to customers when their order is in-transit, out for delivery and when it’s delivered.
• Display a “where is my order” link on your customer service page.
• Overcommunicate delivery time frames, including estimated delivery date information on all relevant emails and web pages.

Act Fast and Implement These Strategies to Claim Your Holiday Gift Early

We’ve outlined several initiatives that can increase holiday conversions and customer satisfaction while reducing shipping costs. You must invest early to bring these initiatives to life so you can maximize return on investment this holiday season. 

• Provide date-certain shipping choices on product detail and shopping cart pages (i.e., deterministic shipping) to increase conversion.
• Create urgency to order now (to receive by specific date) to increase conversion.
• Reward customers for choosing later delivery to reduce shipping expenses.
• Provide frequent and prominent order-tracking updates on your website and through email to reduce WISMO calls, increase satisfaction, and lower customer service costs.

This holiday season, consider a new gift to bring cheer to your customers and your company. More shipping choices, a higher conversion rate and lower shipping expenses.

Manish Chowdhary is the CEO of Pulse Commerce, an order management and inventory platform.